http://www.researchonline.mq.edu.au/vital/access/services/Feed ${session.getAttribute("locale")} 5 http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:11079 The adoption of A-IFRS has resulted in the introduction of fundamental changes to the Australian accounting and reporting regime for goodwill. The impairment testing led approach to goodwill reporting required under A-IFRS results in a materially different approach to goodwill valuation for balance sheet purposes and to the nature and timing of the influence of goodwill as an asset class on the determination of periodic profit. Arguably, the transition to A-IFRS goodwill accounting and reporting also results in substantially increased complexity – both in terms of the techniques required of reporting entities in accounting for goodwill, and in the nature of disclosures required in relation to goodwill and its impairment. This suggests the possibility of inconsistent compliance and varying levels of disclosure quality by firms making their first reports under the new regime. Consequently, this paper examines the level of compliance with a variety of the provisions of AASB 136 – Impairment of Assets and the quality of disclosure provided in accordance with that standard, by reviewing the 2006 accounts of a sample of 50 large Australian listed corporations. Material levels of non compliance were found and a material degree of variation in the quality and precision of disclosures pertaining to impairment testing procedures was also evident. Policy recommendations and potential directions for future research are identified and discussed. 2012-04-03T23:20:04.756Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:15632 Australian small business (SB) represents 96% of all private sector business, employs almost 3.3 million people and enjoys an average growth rate of 3.5 percent. The Service Sector (SS) has enjoyed a rapid growth rate due to the evolution of the global economy and information technology, as well as the shift from production to market orientation; it is the largest component of the Australian economy in terms of the numbers businesses, employment and gross value added. Small firms are found in abundance within this sector. This therefore indicates that the Australian economy is heavily dependent upon the health and vitality of the small firm; it is critical to measure SB performance. Despite this contribution, the small business sector, and in particular the service sector component, appear to be under-represented in the development of specific performance measurement models, which, within the academic and professional literature appear to focus on their larger firm counterparts. Given the unique position of small business service organisations the above suggests a critical need for the design and development of an industry specific performance model suitable for this sector. This paper has been produced during the research project and reflects theory and research extracts from the literature review and the methodological approach to develop such a model. 2011-10-22T20:10:06.296Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:11080 The ASX listing rules and various provisions of the Corporations Act require that listed corporations keep capital markets informed (subject to carve out exceptions) of any information that a reasonable person would expect to have a material impact on the price or value of its securities. An effective continuous disclosure regime represents a key element of a framework for facilitating informed markets. As such, evidence on the extent to which the continuous disclosure system is functioning is of significance to the regulatory and investment communities alike. This paper questions whether the Australian continuous disclosure regime is working and being enforced at an appropriate level, by forensically reviewing the affairs of listed wine producer Evans & Tate limited during that firm’s ill fated 2005 financial year. It is argued that while that firm did indeed continuously disclose financial and non financial information as required, much of the content of that disclosure was misleading. Despite this, no regulatory action has been taken against the firm or its directors. It is therefore concluded that there may be serious deficiencies in the operation of Australia’s continuous disclosure framework, particularly in relation to the nature of regulatory responses to apparent breaches of the system. 2011-01-05T05:50:19.418Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:10641 This study examines audit partner rotation practices prior and subsequent to the implementation of Professional Statement F1 on 31 December 2003. This study is motivated by concerns that the cost of implementing mandatory partner rotation would be disproportionately higher for small audit firms. As expected, where audit partner tenure was high, the change in partner rotation policy did have a significant effect on existing partner rotation practices. Despite voluntary rotation practices prior to Professional Statement F1, further reductions in long tenure occurred for Big 4 audit firms. There are however exceptions to Professional Statement F1 (2002), consistent with the need for ASIC relief provisions in CLERP 9. The results indicate a higher incidence of long signing partner tenure for small audit firms, supporting concerns that small audit firms incur higher costs in complying with mandatory rotation and have been adversely affected by the mandatory imposition of these requirements. The descriptive evidence suggests that auditors in locations outside Australia’s three major cities are likely to have longer audit partner tenure than those located in Brisbane, Melbourne, or Sydney; however this effect is not significant in the multivariate analysis. 2010-11-19T08:51:00.390Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:10642 Recent research examines the implications of components of accruals for future profitability. Richardson, Sloan, Soliman and Tuna (2006) decompose accruals into components in order to explain the lower persistence of accruals for future profitability, relative to the cash flow component of earnings. Prior research suggests that the persistence of earnings varies with profitability. If earnings persistence varies between profitable and loss-making companies, then we would also expect differences in the persistence of the components of earnings. We find evidence suggesting that the component of accruals related to revenue growth and change in asset turnover are less persistent than the cash flow component of earnings for profitable Australian companies. For loss-making companies, however, the persistence of the accrual component of earnings is found to be higher than for the cash flow component of earnings, suggesting that the accrual component is more informative than the cash flow component in explaining period ahead profitability for many currently unprofitable companies. The relatively higher persistence of total accruals extends to accruals that are related to revenue growth and accruals that are unrelated to growth that have been inferred to capture elements of accounting distortions. 2010-11-19T08:50:56.728Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:9261 The current Australian corporate reporting and governance environment provides a setting in which effective monitoring of management should occur. It is widely viewed that such monitoring is necessary to counter managements incentives to smooth earnings. This study evaluates the effectiveness of the new Australian Stock Exchange (ASX) corporate governance guidelines in this regard, by examining the association between earnings management and corporate governance mechanisms related to the board of directors and the audit committee. Information on these mechanisms is reported by many firms in compliance with guidelines issued by the ASX in 2003. Based on a sample of 186 listed Australian firms in 2005, as hypothesized, the role separation between the Chief Executive Officer (CEO) and the Chair of the Board is found to be significantly related to a lower level of earnings management. However, it is surprising to find that lower remuneration of non-executive directors, by fixed payment and by equity ownership, is significantly associated with a lower level of earnings management, rather than a higher level as predicted by agency theory. By comparison to the results of an earlier Australian study, it is noted that the new ASX corporate governance guidelines have not significantly affected the relation between corporate governance and earnings management in 2005. 2010-08-23T12:50:28.972Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:8849 This paper uses data from the Australian local government context to investigate the factors that are associated with the choice of a quality auditor when audit tendering is compulsory. Three auditor choice decisions are examined: (i) appointment of a Big N or non-Big N auditor, (ii) appointment of a specialist or non-specialist auditor, and (iii) appointment of a new auditor (rotation) or reappointment of the incumbent audit firm (retention). The study uses annual report and other publicly available data for 125 local councils in the Australian state of New South Wales (NSW) over the ten year period 1993-2003. Appointment decisions are examined for two successive tenders (in the fiscal years 1995 and 2001). As expected, the study finds size, political visibility, location and audit risk to be associated with appointment of a quality audit firm. Political visibility, location, growth, incumbent auditor and audit partner change are found to be associated with auditor rotation/retention decisions. Local councils in NSW used the compulsory audit tendering opportunity to increasingly align themselves with a specialist auditor. Councils that were more politically visible were also found to be more highly aligned with a specialist auditor. The results are not consistent with competitive tendering leading to choice of a lower quality auditor. 2010-07-06T00:10:18.294Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:8796 This study examines auditor and audit environmental attributes perceived to be important when appointing an auditor within the context of compulsory audit tendering (CAT) in Australian local government. The New South Wales Local Government Act (1993) introduced compulsory audit tendering as the means of external audit procurement for local councils in the Australian state of New South Wales. The Act mandated auditor selection decisions for local councils by requiring them to tender their audit services every six years, for tenure periods of six years. A survey of local council finance managers (equivalent to chief financial officers) was conducted to collect data on perceptions of attributes important in the auditor appointment decision within a CAT context. The study found that auditor and audit environmental attributes relating to audit quality, specifically technical competence, reputation and relationships with the incumbent auditor, were perceived to be the most important considerations in the auditor appointment decision. The study provides initial evidence to suggest that audit tendering is not necessarily associated with lower levels of audit quality, as has been claimed, and provides preliminary evidence on what might be expected if compulsory audit tendering is adopted in other jurisdictions. 2010-06-29T10:50:33.616Z ]]> http://www.researchonline.mq.edu.au/vital/access/manager/Repository/mq:6906 The International Accounting Standards Board (IASB) has extended its convergence project to meet the needs of small and medium-sized enterprises (SMEs). It is developing a separate set of financial reporting standards that are suitable to SMEs. The countries adopting the SME International Financial Reporting Standards (IFRSs) are allowed discretion by the IASB on how to distinguish between large entities and SMEs. Countries adopting the IFRSs and SME IFRSs would need to embrace at least a two-tiered model which encompasses the distinctive characteristics of both large entities and SMEs. It is important that the distinction between large entities and SMEs are thoughtfully made by both local and international standard setters. With particular reference to Fiji, this paper has demonstrated that countries are struggling to identify the appropriate strategy to employ in adopting both IFRSs and SME IFRSs together. This paper offers implications on how countries can embrace both IFRSs and SME IFRSs that are compatible with the social and economic environment of the country and the information needs of its users. 2010-01-27T22:11:46.059Z ]]>